Taseko tables financing

Vancouver Smelling a possible recovery in the price of copper, Taseko Mines (TKO-V) is seeking up to $5.5 million in financing to determine the economic viability of a new technology aimed at reviving the dormant Gibraltar mine in British Columbia.

"We believe that this financing is an integral step to a re-start of the fully equipped Gibraltar copper mine and, subject to feasibility results and financing, construction of the new refinery at the mine site," says Taseko’s CEO, Ron Thiessen. "This industrial development would be a precedent setting initiative for the B.C. mining industry, and successful implementation of the new processing technology would positively affect copper deposits and existing mining operations throughout the Province of British Columbia."

The Hunter Dickinson-led junior is offering from between 1,000-to-5,500 limited partnership units of Gibraltar Engineering Services Ltd. (GESL) at a price of $1,000 per unit. Haywood Securities is acting as the agent.

The proceeds will be used for final testwork, engineering and feasibility of applying the hydrometallurgical technology developed to extract pure copper from concentrates in a refinery to be built at the Gibraltar mine near Williams Lake.

In August, 2000, a scoping study concluded that the proposed refinery would result in a 22% reduction in copper production costs by eliminating the cost of transporting concentrate to offshore processing locations, reducing smelter charges and the achievement of greater mine site efficiencies. Mine start-up and refinery construction costs are currently estimated to be $120 million.

Taseko acquired the 35,000-tonne-per-day, mine-and-mill facility in 1999, with a view to examining its potential for producing copper cathode from concentrates using an innovative hydrometallurgical process developed by Cominco Engineering Services (CESL), a division of Teck Cominco (TEK-T).

Earlier this year, Taseko trucked 900 tonnes from Gibraltar to CESL’s demonstration plant near Vancouver, where it was processed into 7 tonnes of concentrate grading 24% copper for testing. The company noted that testwork to date “has confirmed operating parameters, such as copper recoveries and the autoclave retention time, used in the scoping study.”

Gibraltar operated for 27 years, until 1998, when it was closed by then-owner Boliden Westmin because of low copper prices. Sulphide resources, using a 0.2% copper cutoff grade, stand at 745 million tonnes, containing about 4.7 billion lbs. copper. This includes measured and indicated resources of 149 million tonnes grading 0.31% copper and 0.01% molybdenum in the 12-year mine plan, plus additional measured and indicated resources of 596 million tonnes grading 0.28% copper and 0.01% molybdenum. The project also has in-pit oxide resources suitable for processing in the existing solvent extraction-electrowinning plant.

Under an agreement between Taseko, Gibraltar and the GESL partnership, Taseko and Gibraltar can acquire the business of the partnership for a defined purchase price, which reflects a 30% premium over the GESL Partnership’s expenditures (expected to be equal to 90% of the offering amount) on the defined work program. Taseko and Gibraltar may fund the purchase by paying cash, or by issuing common shares of Taseko.